World View & Market Commentary. Forest first; Trees second. Focused on Real & Knowable facts that filter through the "experts" fluff and media hyperbole. Where we've been, what the future may hold and developing a better way forward.

Monday, May 16, 2011

Equity futures are lower this morning with the dollar flat, bonds slightly lower, oil down slightly at $98 and change, silver & gold are both off a little, and food commodities are mixed.

The Empire State Manufacturing Index plunged from 21.7 all the way to 11.88 which is way below the consensus range. Here’s Econospin:

HighlightsThe first indication on this month's activity in the manufacturing sector points to a slowing in an otherwise still solid rate of growth. The Empire State index fell nearly 10 points to 11.88, a level that's well over zero to indicate month-to-month growth but below April's 21.70 level to indicate a slowing rate of growth.

The news is definitely not that bad with new orders and shipments still strong, though again showing slower rates of growth than April. Unfilled orders show an increasing rate of growth with inventories posting a sizable build. Job indications are special positives with the number of employees on the rise and the workweek on the rise. Price readings are a concern with inputs rising sharply to their highest level since 2008 and output prices, that is prices that customers pay, at a high and slightly accelerating level.

A plus in the report is data on the six-month outlook where optimism across nearly all readings is on the rise. This report is mixed but does point to healthy growth. The Philadelphia Fed will post its report on the manufacturing sector on Thursday.

We’ve had a huge shot of sugar in the form of massive money printing. That money printing has masqueraded as “growth,” but also as productivity because things that are measured in dollars will appear to grow (apparent growth) when the value of the dollar is being diluted with quantity. Thus, I expect that any attempt to wean our economy off the sugar will result in a pretty quick case of glucose crash. And thus the need to inject more figurative sugar for the addict as the economy rots from the inside out just as a drug addict’s teeth rot and fall out.

Yeah, not a pretty sight... but an accurate analogy nonetheless.

The monthly TIC flows for March continue to look very questionable to me as they don’t match what I’m seeing in the rest of the world. If you believe the Treasury’s accounting, then March saw net foreign inflows of $24 Billion. Sorry, but I don’t believe it and never will… not with central bankers skanky swapping and never ending creative self-aggrandizing financial engineering (Note the head of the IMF chasing maids naked down the hallway is just one aspect of their narcissistic personality wherein everything on the planet is here to cater to their desires).

HighlightsNet foreign purchases of long-term U.S. securities slowed slightly in March to a moderate $24.0 billion from $27.2 billion in February (revised from $26.9 billion). Foreign purchases totaled $54.7 billion in March offset but by $30.7 billion in purchases of foreign securities by U.S. residents.

Holding back March's inflow were purchases by official accounts which slowed. In a positive, private investors showed strong demand for U.S. securities especially equities. Private demand for Treasuries, corporate bonds and government agencies all show month-to-month gains. Total inflow, which includes short-term securities, rose nearly $10 billion in the month to $116.0 billion.

A negative in the report is Treasury disinvestment by China where holdings slipped more than $9 billion to $1.15 trillion. This dip is limited but does extend a long trend of monthly decline. Holdings by Japan, which is the second largest foreign holder of Treasuries, rose nearly $18 billion to $907.9 billion. This reading will be interesting to watch to see if Treasury selling picks up as Japan rebuilds.

The Housing Market Index is released at 10 Eastern today, and tomorrow will bring Housing Starts and Industrial Production, the rest of the week will be the usual parade of half truths and disinformation with a quiet Friday. Of course we have to be tortured with the debt ceiling limit debate – you know... threats from the Secretary Treasurer, threats from the bankers, and now threats from our President who sounds as if his mouth is remote controlled directly from Jamie Dimon’s office at JPMorgan.

The latest report from PIMCO shows that Bill Gross has loaded his “equity fund” up with gold which is now the largest holding in that fund. Hmmm… why do you suppose that is?

Now, only about a year-and-a-half behind us and those who pay attention, 60 Minutes finally aired a piece on the corrupt actions of the banks regarding loan processing. This piece falls woefully short in its discussion of outright bank fraud, the setting up and use of MERS is not even mentioned. Still, even with much of the fraud missing, it’s obvious that it’s nothing but non-stop fraud 100% of the time. The other thing is that this piece leads you to believe something’s changed, it hasn’t:

But not to worry, the “Federal Reserve Bank” (not Federal, no Reserves, not a bank) of New York vows that they are going to “fix” this securitization mess! As if they have the jurisdiction to do so! As if they can simply chase any old maid naked down the hall they wish! It’s a nice fantasy, really… no, you pervert, I’m talking about anointing yourself the power and ability to print your own money!

And what's not even being discussed is how the banker's fraud created an overpriced bubble for EVERYONE. Everyone who lives in a home, be it rent or own, pays too much to live in that home because of the fraud perpetrated by the bankers. Let that sink in... this is FAR beyond simple paperwork fraud or simple lazy paper "errors."

The mess in Europe to me is just such a sad joke. The never ending talk of bailouts, rejection of bailouts, debt limits, defaults, etc… sad. It’s sad that the people of the world have been enslaved by the debt pushers and that they are failing to break free from their trap. More disinformation and news over there than you can shake a stick at, I won’t even attempt to cover it all because the bottom line is clear to me. That being that Europe is saturated with debt, the math is impossible, and all attempts to force more debt or to “restructure” via longer loan terms is nothing but kicking the debt bubble down the road. Default is 100% going to happen, and is in fact already in progress via devaluation of everyone’s money.

The situation in Fukushima is dire. Very high amounts of radiation have been found in areas of Tokyo. The Japanese are pretending that this radiation does not exist and the government and TEPCO have been slow leaking the data – all the while school children go to schools that are massively polluted with radiation. The reactors are melted down, the cores have obviously been breached. The phony “plan” meant to placate the public just a few weeks ago has already completely fallen apart. Meanwhile those reactors continue to spew radiation, and that radiation absolutely is making its way around the planet while being ignored by all the world’s governments, and particularly our own.